The balance sheet of the Fred, Gini, and Peggy partnership on December 31, 2011, together with profit sharing ratios, revealed the following:
|
Cash |
$240,000 |
Fred capital (30%) |
$ 200,000 |
|
Other assets |
360,000 |
Gini capital (30%) |
170,000 |
|
Peggy capital (40%) |
230,000 |
||
|
$600,000 |
$ 600,000 |
Gini is retiring from the partnership, and the partners agreed that she should receive $200,000 cash as payment in full for her share of partnership assets. If the goodwill implied by the settlement with Gini is recorded on the partnership books, total partnership assets after Gini’s withdrawal should be:
a $566,667
b $500,000
c $430,000
d $400,000